Yellen remarks: default in the United States may lead to recession

US Treasury Secretary Janet Yellen warned that defaulting on government debt will likely leave millions of Americans without income payments, which could lead to a recession that could destroy many American jobs and companies.

Yellen urged Congress to avoid the eleventh hour brinksmanship on the debt ceiling in 2011 that led to the first ever downgrade of the US credit rating. It could slow down the US economy.

“Our economy will suddenly find itself in an unprecedented economic and financial storm,” Yellen said, adding that 66 million Social Security beneficiaries and millions of veterans and military families will likely not get paid, stressing that “the resulting income shock could lead to a recession that destroys many jobs and businesses.”